Corporate Welfare Through Copyright Welfare

Guest Editorial

United States citizens may not be aware of legislation that lines the pockets of large corporations, and well-heeled individuals and entities at the expense of the American public.

The bills in question, HR 2589, and S 505, extend copyright ownership to those holding copyrights for an additional 20 years. HR 2589 has passed the subcommittee, and is headed to full judiciary committee in Jan. of 1998. It has been orchestrated by the subcommittee as a “popular” bill. Letters are pouring in supporting it.

Of course letters are pouring in! Those who get this copyright extension will gain a ton of money from the copyright term extension. The problem is, YOU will pay the bill.

Copyrights are for a limited time. When copyrights expire, the works fall into the public domain. The public domain is yours, and mine. That means you or I can use the song, book, movie, or whatever copyrighted work that has expired in any way we like. The material becomes public property as required by the copyright clause of the Constitution. Scholars, new authors, educators, and the public benefit from the public domain.

However, the copyright owners do not want to let go. Present terms of copyright are 50 years AFTER the death of the author, or 75 years (depending on when the work was made, or type of copyright). This is a long time to enjoy a monopoly. Every time copyrighted music or works are used, royalties are paid. If you hear music on a video, radio, at a summer camp, or on TV, (music copyright), or see a high school play (literary copyright), payments are being made to copyright owners. Plays for schools cost hundreds or thousands to license. A single Gershwin song licensed for a year to United Airlines cost today $250,000. Imagine how much money is collected by ASCAP & BMI (music licensing organizations). It is staggering. Copyright owners want 20 more years!

So, what is it to you, the public? You are paying the bill. When United Airlines pays a quarter of a million to use a song, it is passed to you as higher ticket prices. If it was PD, anyone could use it. If the high school play was in the public domain, the school could use the thousand dollars in licensing fees for other educational purposes. You would spend less tax dollars for education. Multiply these figures by ALL school usage and ALL music usage and a HUGE amount of royalties are passed on to the American consumer. As far as the public is concerned, public domain is GOOD, not bad. Public domain is a national resource.

Large corporations and studios own vast amounts of copyrights. Many of the copyrights they did not create. They were bought and acquired through mergers. An example is Warner or Sony, who own copyrights to music and films. After 75 years works from 1922 are finally falling into public domain. Schools can use them. Historians can use them. New authors can reuse and rework them in new creations.

However, the large corporations and wealthy personal trusts are collecting vast amounts of royalties. So they just lobby congress and introduce 20-year extension legislation. By the way, in 1976 they lobbied for a 19-year extension and got it. (Think what THAT has already cost you–and now they want more!.)

The proposed legislation is no more than a welfare measure for the benefit of those persons who own copyrights on old works–a wealth transfer imposed on the American public for the benefit of large corporations (like Disney, whose copyright on Mickey Mouse has only a decade or so to run) and descendants of creative authors like George Gershwin or Oscar Hammerstein II. Schools that wish to publicly perform plays and music, archivists who wish to restore lost or forgotten works, scholars and creative artists who wish to use these cultural building blocks in creating new works, and the U.S. public in general through its royalty payments will foot a very heavy bill. New creativity and scholarship will suffer badly and irretrievably.

When George Gershwin was writing his music, the copyright term was for a maximum of 56 years. That term was extended by 19 years in 1976. According to a Wall Street Journal article, a nationwide license for a single Gershwin song went for $45,000 to $75,000 15 years ago and now goes for $200,000 to $250,000. Taking average of the lower end figures, that amounts to $122,500 per year for 19 years–$2,327,500–of extra royalties that have already flowed into the coffers of the Gershwin family trust in those 19 years for a single song. The 20-year copyright term extension would therefore add tens, perhaps hundreds, of millions of dollars to a trust that has already been more than generously rewarded for George Gershwin’s wonderful contributions to American culture.

Ultimately those dollars are paid by US citizens in the form of higher prices, and in the loss to US citizens of new works that could creatively rely on Gershwin’s music but whose potential authors cannot afford the license fees.

Think of the millions of dollars in copyright royalties the American public will pay in schools, restaurants, summer camps, TV broadcasts, library uses if 20 more years of copyright royalties are granted. These will be passed on tho the American consumer, you and me.

George Gershwin and Walter Donaldson are as much a part of the American heritage as Stephen Foster and Mark Twain. Like those great icons, their works, too, should eventually be part of our common cultural heritage that is available to all. Copyright term extension is a bad idea that must be defeated in Congress. That will happen only if public voices are raised, loud and strong, in the public interest.

This argument is not anti-copyright, nor anti-author. Copyright owners enjoy sufficient copyright terms in the United States to enjoy the fruits of their labor without the extension. HR 2589 and S 505 is special interest legislation introduced to Congress by those who will benefit from it–not current creators but descendants and assignees of creative artists from the past. Will Congress work in the public interest, or will Congress tax the public with continued royalty payments? Congress may be abusing the public trust by ignoring the financial and creative costs this legislation imposes on American citizens.

The public costs are too great to grant a 20 year extension in copyright. Contact those legislators responsible for this public giveaway today.

We are Hanno Beck, Lindy Davies, Fred Foldvary, Mike O'Mara, Jeff Smith, and assorted volunteers, all dedicated to bringing you the news and views that make a difference in our species struggle to win justice, prosperity, and eco-librium.

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Arts & Letters

Geonomics is …

the annoying habit of seeing the hand of land in almost all transactions. In geonomics we maintain the distinction between the items bearing exchange value that come into being via human effort — wealth — and those that don’t — land. Keeping this distinction in the forefront makes it obvious that speculating in land drives sprawl, that hoarding land retards Third World development, that borrowing to buy land plus buildings engorges banks, that much so-called “interest” is quasi-rent, that the cost of land inflates faster than the price of produced goods and services, that over half of corporate profit is from real estate (Urban Land Institute, 1999). Summing up these analyses, geonomists offer a Grand Unifying Theory, that the flow of rent pulls all other indicators in its wake. Geonomics differs from economics as chemistry from alchemy, as astronomy from astrology.

close to the policy of the Garden Cities in England. Founded by Ebenezer Howard over a century ago, residents own the land in common and run the town as a business. Letchworth, the oldest of the model towns, serves residents grandly from bucketfuls of collected land rent (as does the Canadian Province of Alberta from oil royalty). A geonomic town would pay the rent to residents, letting them freely choose personalized services, and also ax taxes. Both geonomics and Howard were inspired by American proto-geonomist Henry George. The movement launched by Howard today in the UK advances the shift of taxes from buildings to locations. A recent report from the Town and Country Planning Association proposes this Property Tax Shift and their journal published research in the potential of land value taxation by Tony Vickers (Vol. 69, Part 5, 2000). (Thanks to James Robertson)

of interest to Dave Lakhani, President Bold Approach (Mar 8) and Matt Ozga (Jan 29): “I write for the Washington Square News, the student run newspaper out of New York University. Geonomics seems like it has great significance, especially in this area. When was geonomics developed, and by whom?”
About 1982 I began. Two years later, Chilean Dr Manfred Max-Neef offered the term geonomics for Earth-friendly economics. In the mid-80s, a millionaire founded a Geonomics Institute on Middlebury College campus in Vermont re global trade. In the 1990s, CNBC cablecast a show, Geonomics, on world trade as it benefits world traders. My version of geonomics draws heavily from the American Henry George who wrote Progress & Poverty (1879) and won the mayoralty of New York but was denied his victory by Tammany Hall (1886). He in turn got lots from Brits David Ricardo, Adam Smith, and the French physiocrats of the 1700s. My version differs by focusing not on taxation but on the flow of rents for sites, resources, sinks, and government-granted privileges. Forgoing these trillions, we instead tax and subsidize, making waste cheap and sustainability expensive. To quit distorting price, replace taxes with “land dues” and replace subsidies with a Citizens Dividend.
Matt: “This idea of sharing rents sounds, if not explicitly socialist, at least at odds with some capitalist values (only the strong survive & prosper, etc). Is it fair to say that geonomics has some basis in socialist theory?”
A closer descriptor would be Christian. Beyond ethics into praxis, Alaska shares oil rent with residents, and they’re more libertarian than socialist. While individuals provide labor and capital, no one provides land while society generates its value. Rent is not private property but public property. Sharing Rent is predistribution, sharing it before an elite or state has a chance to get and misspend it, like a public REIT (Real Estate Investment Trust) paying dividends to its stakeholders – a perfectly capitalist model. What we should leave untaxed are our sales, salaries, and structures, things we do produce.

as unfamiliar as geo-economics. The latter is a course some universities offer that combines geography and economics. A UN newsletter, Go Between (57, Apr/May ’96; thanks, Pat Aller), cited an Asian conference on geopolitics and “geoeconomics”. The abbreviated term ‘geonomics” is the name of an institute on Middlebury College campus and of a show on CNBC. Both entities use the neologism to mean “global economics”, in particular world trade. We use geonomics entirely differently, to refer to the money people spend on the nature they use, how letting this flow collect in a few pockets creates class and poverty and assaults upon the environment, and how, on the other hand, sharing this rental flow creates equality, prosperity, and a people/planet harmony. This flow of natural rent, several trillions dollars in the US each year, shapes society and belongs to society.

what you do when you see economies as part of the ecosystem, following feedback loops and storing up energy. Surplus energy – fat or profit – enables us to produce and reproduce. To recycle society’s surplus, the commonwealth, geonomics would replace taxes with land dues (charged to users of sites and resources, including the EM spectrum, and extra to polluters), and replace subsidies with rent dividends to citizens (a la Alaska’s oil dividend). Without taxes and subsidies to distort them, prices become precise, reflect accurately our costs and values; then, motivated by no more than the bottom line, both producers and consumers make sustainable choices. While no place uses geonomics in its entirety, some places use parts of it, most notably a shift of the property tax off buildings, onto locations. Shifting the property tax drives efficient use of land, in-fills cities, improves the housing stock, makes homes affordable, engenders jobs and investment opportunities, lowers crime, raises civic participation, etc – overall it makes cities more livable. Geonomics – a way to share the bounty of nature and society – is something we can work for locally, globally, and in between.

one of many words I coined over 20 years ago: geoism, geonomics, geonomy, geocracy, etc – neologisms that later others came up with, too. CNBC once had a Geonomics Show, and Middlebury College has a Geonomics Institute. If “economy” is literally “management of the household”, then geonomy is “management of the planet”. The kind of management I had in mind is not what CNBC was thinking – top-down. My geonomics is not hands-on, interfering, but hands-off, organic. It’d strive to align policy with natural processes, similar to what holistic healing does in medicine, what organic farming does in agriculture. Geonomics attends to two key components: One, the crucial stuff to track is fat – or profit, especially profits without production, such as rent, or all the money we spend on the nature we use. Society’s surplus is the sine qua non for growth, needed to counter death – not merely more, but sustainable development, more from less. Two, the basic process to respect is the feedback loop. These let nature maintain balance automatically and could do the same for markets, if we let them. Letting them would turn our economies, now our masters, into a geonomy, our servant, providing us with prosperity, eco-librium (to coin a term) and leisure, time off – a hostile environment for economan but a cradle for a loving and creative humanity.

one of many words I coined over 20 years ago: geoism, geonomics, geonomy, geocracy, etc – neologisms that later others came up with, too. CNBC once had a Geonomics Show, and Middlebury College has a Geonomics Institute. If “economy” is literally “management of the household”, then geonomy is “management of the planet”. The kind of management I had in mind is not what CNBC was thinking – top-down. My geonomics is not hands-on, interfering, but hands-off, organic. It’d strive to align policy with natural processes, similar to what holistic healing does in medicine, what organic farming does in agriculture. Geonomics attends to two key components: One, the crucial stuff to track is fat — or profit, especially profits without production, such as rent, or all the money we spend on the nature we use. Society’s surplus is the sine qua non for growth, needed to counter death – not merely more, but sustainable development, more from less. Two, the basic process to respect is the feedback loop. These let nature maintain balance automatically and could do the same for markets, if we let them. Letting them would turn our economies, now our masters, into a geonomy, our servant, providing us with prosperity, eco-librium (to coin a term) and leisure, time off — a hostile environment for economan but a cradle for a loving and creative humanity.

a study of Earth’s economic worth, of the money we spend on the nature we use, trillions of dollars each year. We spend most to be with our own kind; land value follows population density. Besides nearness to downtowns, we also pay for proximity to good schools, lovely views, soil fertility, etc. These advantages, sellers did not create. So we pay the wrong people for land. Instead, we should pay our neighbors. They generate land’s value and deserve compensation for keeping off ours, as they’d pay us for keeping off theirs. It’s mutual compensation: we’d replace taxes with land dues – a bit like Hong Kong does – and replace subsidies with “rent” dividends to area residents – a bit like Alaska does with oil revenue. Both taxes and subsidies – however fair or not – are costly and distort the prices of the goods taxed and the services subsidized. By replacing them and letting prices become precise, we reveal the real costs of output, the real values of consumers. Then, just by following the bottom line, people can choose to conserve and prosper automatically. A community could start by shifting its property tax off buildings, onto land – a bit like a score of towns in Pennsylvania do; every place that has done it has benefited.

shaped by reality. In the 1980′s, the Swedish government doubled its stock transfer tax. Tax receipts, however, rose only 15%, since traders simply fled to London exchanges. Fearing a further exodus, the Swedish government quickly rescinded the tax altogether. (The New York Times, April 20) That willingness to tax anything leads us astray. Pushing us astray is that unwillingness to pay what we owe: rent for land, our common heritage. Assuming land value is up for grabs, we speculate. We cap the property tax on both land and buildings and the rate at which assessments can go up; while real market values rise quicker, assessments can never catch up. Our stewards, the Bureau of Land Management, routinely sell and lease sites below market value, often to insiders, says the Government Accounting Office. Once we grasp that rent is ours to share, we’ll collect it all, rather than let it enrich a few, and quit taxing earnings, which do belong to the individual earner. That shift is geonomic policy.

a way to connect the dots. Making the cyber rounds is “The Cavernous Divide” by Scott Klinger, from AlterNet (posted March 21): “As the number of billionaires in the world expands, so does the number of those in poverty.” Duh. The yawning income gap is not news. Nearly every issue of our quarterly digest carries a similar quote. Yet the connection was worked out long ago by one of America’s greatest thinkers, Henry George, who labeled his masterpiece, Progress and Poverty. Techno- and socio-advances always enrich few and impoverish many. Yet progress also pushes up location values – the geonomic insight (is Silicon Valley cheaper now or more expensive?). Instead of taxing income, sales, or buildings, society could collect those values of sites, resources, EM spectrum, and ecosystem services via fees and dues, which would lower the income ceiling, and instead of lavishing corporate welfare, pay out the recovered revenue via dividends, which would jack up the income floor. Dots connected.